Mirae Asset Group founder and Global Strategy Officer Park Hyeon Joo (File photo by Hyuk Choi)
Mirae Asset Group, the pioneer in South Korea’s mutual fund industry, plans to set up an artificial intelligence business unit in New York as the financial conglomerate aims to expand global investment services with robo-advisors for future growth.
“WealthSpot, Mirae Asset Group’s AI unit, is set to be opened in New York soon,” the group founder and Global Strategy Officer Park Hyeon Joo told The Korea Economic Daily in an interview on Tuesday. “We will dispatch Mirae Asset’s core executives such as Kim Yeon Chu, head of derivatives, to lay the foundation for the business.”
Kim, who is touted as one of the group’s future leaders along with Kim Namki, head of Mirae Asset Global Investments Co.’s exchange-traded fund (ETF) business, was appointed to head of WealthSpot.
The New York unit is poised to oversee the group’s AI business and handle the robo-advisor sector, global investment asset allocation and ETF development.
Robo-advisors are digital platforms that provide automated, algorithmic investment services with minimal human supervision.
BETTER RETURNS
Funds with robo-advisors based on AI and algorithms reported an annual rate of return of 14.76% on average, far higher than 9.24% logged by South Korean active equity funds, according to a local financial market tracker FnGuide Inc.
The global robo-advisor market was forecast to more than double to 7,700 trillion won ($5.8 trillion) by 2027 from 3,270 trillion won in 2022, the accounting giant PricewaterhouseCoopers (PwC) said.
Mirae Asset aims to apply AI technology to various investment products for global expansions, Park said.
“AI is essential to efficiently allocate assets and launch innovative products earlier than others,” Park said. “AI itself is a global business now.”
“Many investors are still paying significant fees for products and services,” he said. “AI is likely to provide potential solutions to dramatically lower those expenses and change the future of finance.”
Mirae Asset headquarters in Seoul (File photo)
GLOBAL EXPANSIONS
Mirae Asset, South Kora’s first asset manager starting the global business in 2003, has been expanding its overseas markets.
“The era of allocating assets with only those in Korea was over,” Park stressed. “AI is a must to build efficient portfolios with diversified investment assets across the world.”
Mirae Asset acquired Australia’s robo-advisor Stockspot at $18 million in August 2023 while applying for a trademark of WealthSpot to the US Pate and Trademark Office in January.
The South Korean financial group aims to accelerate its global AI business centered on WealthSpot, Stockspot and the conglomerate’s Indian unit. It established Mirae Asset Capital Markets (India) Pvt. in 2018.
“We will launch various AI businesses worldwide,” Park said. “We plan to install an intelligent AI platform throughout the organization while using strong technologies responsibly throughout the work.”
WealthSpot is set to coordinate AI financial strategies of overseas subsidiaries and lead the synergy of the group’s innovative technology.
The core overseas units plan to actively seek AI talent, Park said.
“WealthSpot in the US and Stockspot in Australia are poised to lead the recruitment of global AI talent,” he said.
RETIREMENT PENSION MARKET
Mirae Asset Group has already been providing various AI services, targeting the local retirement pension market, which was estimated at 400 trillion won.
The group completed developing 14 AI algorithms dedicated to retirement pensions including those for asset allocations and thematic products. Those algorithms passed a testbed evaluation by Koscom, which is under the control of the Financial Services Commission.
They will be introduced for trial robo-advisors for discretionary investment services to retirement pensions as soon as the second half after the regulator’s review.
Mirae Asset Group has already attracted 1.4 trillion won from pension clients by May through its retirement pension robo-advisor services.
South Korean financial companies have been heavily investing in robo-advisors as discretionary investment services with the virtual financial advisors are allowed for retirement pensions around the end of this year.
Samsung Asset Management is developing a system to expand AI, which had been used only for corporate clients’ wealth management, into individual pension customers. The system is set to automatically adjust asset allocations after AI learns financial data in addition to the existing quant models.
Midas Asset Management and Life Asset Management introduced AI systems, which provide analysis of global corporate filings to fund managers in real time.
By Ma-Su Choe
bebop@hankyung.com
Jongwoo Cheon edited this article.
